Corporation Tax Act 2010 section 125

Assumptions as to accounting periods

Section 125 sets out the assumptions that must be made about accounting periods when recalculating a surrendering company's EEA amount using United Kingdom tax rules, as part of the EEA group relief provisions.

• This is the third of four sets of assumptions used to recalculate the EEA amount under UK tax rules.
• The assumed accounting period begins at the start of the EEA accounting period of the surrendering company.
• The assumed accounting period ends at the earlier of the end of the EEA accounting period or 12 months from its start, mirroring the standard UK rule that accounting periods cannot exceed 12 months.
• Where an EEA accounting period exceptionally exceeds two years, the process of determining accounting periods is applied repeatedly, so that the entire EEA period is divided into successive UK-style accounting periods of no more than 12 months each.